Joint Account & Bankruptcy

darkbananaman

I am planning my own bankruptcy and have a question about a joint account. I have a joint account in both min and my wifes name. We have a property that has a tenant in it and their rental payments are made into this joint account. When I go bankrupt will this account be frozen? Thanks for you help.

tigerfeet2006

Yes it will. If I were you I would try and get your name off that account if it has no debt on it. Anything like that will be a financial link and will not be good for her credit worthiness.

Have you taken any advice about your BR. Do you understand the implications with the rented property?

darkbananaman

No I don't know what will happen with the rented property. It has negative equity so not sure what will happen. Any ideas? I'm hoping the OR won't be interested in it because of the negative equity therefore not being an asset and the mortgage will just continue to be paid and the tenats pay their rent. Do you have any idea what might happen?

tigerfeet2006

You obviously haven't taken proper advice as yet. Please get in touch with one of the debt charities as listed in the Look Here First sticky.
https://forums.moneysavingexpert.com/discussion/1056083

What will happen is the OR will take your half of the rent as an asset and your OH will have to pay the mortgage in full however she can. As it is not your main residence it is treated differently to the main home.

darkbananaman

So your saying if the tenants pay £1000 rent then the OR will take £500 of it to pay it to the creditors? Leaving not enough left (i.e. only the other £500 to cover the mortgage??).

Hmmm, I spoke to one of the charities and they never mentioned this. Would throw a spanner in the works. Can I sign the house into my wifes name to get around it do you think?

tigerfeet2006

Nope! that is disposing of an asset and the OR can reverse any actions like that and you will be in the deep doodoo! with OR.

Who did you speak to?

darkbananaman

National Debtline - I mentioned tenants in the property. All they said was the OR would not be interested because of negative equity. Surely my half of the rent (£500) is not an asset as it goes to cover the mortgage?

tigerfeet2006

It is an asset. You are not living in the house so it is not your main place of residence so it an extra to your needs so any money from the rent is an asset.

If I were you I would talk to CCCS and get some more advice on this. Though that is very unusual of NDL. May be worth another call to them as well and talk to another advisor. Always worth getting lots of opinions.

darkbananaman

Dammit. OK will give them a call. This really screws things up especially as me and the wife are seperated.

tigerfeet2006

Ah! sorry to hear that.

I will PM someone just to have a quick look at this thread to make sure I am right but I am fairly confident I am but you never know.

Mouse1812

Tigerfeet: isn't because the rent is "income"? (not an asset so to speak). Accordingly the income is taken, leaving you high and dry regarding the liability.